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HESTA urges super funds to adopt new super splitting procedures
HESTA is urging super funds to adopt a new universal, streamlined process to make the splitting of superannuation assets easier, faster and fairer following the results of a successful pilot program.
The Simpler Super Splitting initiative used a plain language form for court orders that could be used across the super and legal sectors and by the courts.
The pilot was undertaken in partnership between Women’s Legal Service Victoria (WLSV), super fund administrator Link Group and Australian Family Lawyers and HESTA and trialled the court-endorsed orders and simplified process in a live super splitting case involving two HESTA members.
Achieving a reduction in time delays and legal costs, HESTA said the time for super trustees to approve draft orders also significantly reduced.
HESTA chief executive, Debby Blakey, said a streamlined industry process for splitting super assets would reduce stress for super fund members at a difficult time in their lives.
“This universal, simplified process will go a long way towards ensuring equity in super outcomes when relationships end, but we need more super funds to come on board,” Blakey said.
“Dividing super assets to date has been an unnecessarily long and complex process, often requiring expensive legal advice that can unfortunately result in many women, especially those from low-income households or who are experiencing disadvantage, walking away from their fair share of super assets.
“Given super is often the largest or only asset in the relationship for low-income families, it means many women are potentially losing their only income in retirement beyond the Age Pension.”
The process for splitting super assets differed from fund to fund. Complexity around obtaining and completing the super splitting orders makes the forms difficult to complete without legal assistance.
Simpler Super Splitting was a joint initiative involving HESTA, WLSV, not-for-profit super fund peak body Australian Institute of Superannuation Trustees (AIST), Women in Super, Link Group, other super fund leaders and representatives from the Federal Circuit Court, government and regulators, with pro bono legal support from Australian Family Lawyers and Mills Oakley Lawyers. Work was already underway to roll the new process out nationally to other super funds.
WLSV CEO, Serina McDuff, said it was great to see a key reform recommended by WLSV in its landmark Small Claims Large Battles report starting to be implemented by the super industry.
“We identified through our report that women missing out on their share of superannuation after separation was contributing to poor economic outcomes, including long-term poverty and homelessness.
“With women aged over 55 the fastest-growing group of homeless people in Australia, we prioritised creating change in this area so we could positively impact women’s economic futures.”
The report found superannuation was the only significant asset for 21% of women represented by WLSV in the research project, and in 39% of all small claims cases, there was a split of super assets.
AIST CEO, Eva Scheerlinck, said: “Simplifying the process of splitting superannuation through family law settlements will benefit all parties by making the process far more efficient, fair and cost-effective. A number of AIST members are in the process of adopting the new templates and we encourage all funds to do so”.
The push for improvements to the splitting of super in family law settlements culminated last year in legislation to improve the visibility of super assets. From 1 April, 2022, parties to family law proceedings could apply to the courts for information from the Australian Taxation Office about their former partner’s super. This single information source on where super assets were held would help make the new super splitting forms easier to complete.
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